SARS warns about January tax change that could see taxpayers pay penalties

The South African Revenue Service (SARS) is expecting a significant jump in income tax returns in 2021, with over 4.3 million non-provisional tax returns submitted to date. This represents an increase of 46% over last year, SARS commissioner Edward Kieswetter said in a press briefing on Monday (13 December).

“Such voluntary compliance reinforces our belief that most taxpayers want to do the right thing and meet their legal obligations. We are working very hard to make this important task easy and simple by providing clarity and certainty and whilst expanding online channels through which taxpayers can transact with our organisation,” said Kieswetter.

“Despite many challenges, including Covid-19 restrictions, load shedding and our own internal limitations, we are pleased that our strategic intent of promoting voluntary compliance is gradually gaining momentum as can be seen in the statistics and trends for this filing season which are very encouraging under the circumstances.”

Still work to do 

Despite the measurable progress, Kieswetter said the organisation will have to work to continually improve its service culture and standards, expand taxpayer education offerings, and promote the online platforms and digital offerings it has created to interact with taxpayers, among other things.

Kiewswetter reminded taxpayers to take note that, from January 2022, SARS will levy penalties where one or more tax returns are outstanding.

“Before the change in the legislation, SARS could only levy penalties where two or more returns were outstanding. Taxpayers are encouraged to submit all outstanding returns including those of previous years.”

Kieswetter said SARS has put in place channels to make it easy for taxpayers to comply. He further urged all non-compliant taxpayers to comply and fulfil all outstanding obligations, and in that way contribute to entrenching the culture of voluntary compliance.

“Our progress in the rebuilding of SARS is slowly progressing. We are encouraged with the results so far, but will learn from the taxpayer experiences of this year, as well as our own mistakes, as we remain resolute in our efforts to modernise SARS.

“In pursuit of our strategic intent of voluntary compliance, it is important that we step up our efforts to provide certainty and clarity to taxpayers whilst working hard to make it easier to comply.”

At the same time, SARs’ ability to detect and respond to non-compliance has shown marked improvement, but we must do more to deter and prosecute dishonest taxpayers and traders, he said.

“These strategic objectives are implicit in our modernisation journey which increasingly will be built on a platform that augments human effort with data-driven insights and enabling technology.”

A summary of the results of this year’s filing season for individuals shows that:

• Over 2.6 million were submitted via eFiling, an increase of 7%, with 523,659 returns submitted via the MobiApp – a 59% increase.

• Over 306,000 returns were submitted via SARS branches, a 15% decrease. SARS agents assisted taxpayers through virtual appointments or later in branches after they reopened on 16 August.

• SARS sent out 3.4 million auto assessments. Over 2.2 million taxpayers have accepted the auto assessment, with more than 1.5 million accepting without any changes. This represents a 74% acceptance rate of a new service offering.

• More than 630,000 taxpayers neither accepted nor edited their returns. SARS said it will send estimated assessments to taxpayers that have not taken any action.

• SARS committed to pay at least 7 out of every 10 taxpayers their refund if it is due, within 72 hours. This year SARS paid out refunds to 86% of taxpayers within 72 hours. Last year, 77.38% of refunds were paid within 72 hours. In all, SARS paid out more than R17 billion in refunds. The average refund was R11,000

Read: SARS boss Edward Kieswetter sends warning to tax evaders